I’ve just finished reading The Undercover Economist
by Tim Harford. It’s an excellent introduction to "real world" economics. The book begins with a brisk and fun analysis of the price of coffee (and particularly why the coffee in Waterloo station costs so much…) and eventually explains how China got Rich (or at least, richer), visiting some basic economic theory, how to reduce traffic congestion, trade liberalization/globalization, auction design and more along the way. It’s all written in an immediately accessible style which you can sample in some of Tim Harford’s other writing, and his Dear Economist column from the FT. I really enjoyed the book and learned a lot (that I thought I already knew, but didn’t really understand in the same way). Steven Levitt’s Freakonomics was the other hit popular economics book of 2006 (which was also a great read, bar the final chapter on baby names), but The Undercover Economist taught me more and kept me hooked to the last page. Highly recommended.